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Customer Ratings: Methodologies & their Presentationhttps://customerrating.wordpress.com/2013/04/26/customer-ratings-methodologies-their-presentation/
https://customerrating.wordpress.com/2013/04/26/customer-ratings-methodologies-their-presentation/#respondFri, 26 Apr 2013 10:27:22 +0000http://customerrating.wordpress.com/?p=61Continue reading →]]>The most widely used Customer Satisfaction Methodology is the American Customer Satisfaction Index (ACSI), where end-users respond to a questionnaire, rating their satisfaction for a good or service on a 1-10 scale. According to ASCI, Amazon has consistently received better ratings than Ebay since the year 2000.

So why do customers constantly give Amazon a better rating than Ebay? And what about customer ratings for individual items and vendors on Amazon and Ebay? Is there any difference? The answer is yes: On Amazon, as soon as you see an individual product listed from a specific vendor, you will also see that vendor’s rating, in stars and in percentage, next to the product. This allows the user to immediately visualize the trustworthiness of the vendor. On Ebay, however, you must first select the product as if you were going to bid or buy it, before seeing the customer rating of the vendor in stars and percentage. This extra step is less effective and time-consuming for the user, and may have a negative effect on the potential buyer purchasing the item.

Moreover, while Ebay first allowed customers to rate vendors and products, Amazon began “promoting” vendors if they received enough positive feedback and a high amount of sales. A “Fulfillment by Amazon” status on Amazon helps foster trust between the buyer and the vendor, making the buyer more likely to purchase items. Ebay now uses the same strategy, but were behind on this trend.

What about the “feel” or “atmosphere” of these two websites based on customer ratings? Ebay has been said to feel like a “garage sale,” while Amazon is a more straightforward site. It is still possible to bid on some products on Ebay, whereas on Amazon you are sure of the item’s price and availability. This auctioning process on Ebay can confuse the user, deterring them from the site.

Furthermore, when searching an item in either search engine, the products are displayed in two different ways. On Ebay, if you search the product “The Great Gatsby,” you get a long list of results for the same product, from different vendors. Conversely, if you search the same title on Amazon, only one product appears. You are also presented with a table organized by format, price, and new or used. Such a method of organization makes it much easier for the buyer to decide exactly which product he or she wants.

Finally, Amazon establishes trust using a clear customer rating, the atmosphere of an upscale online store, and a succinct and effective method of organization. This is a plus for Amazon’s vendors, who are able to sell their goods for higher prices than those on Ebay, as customers are willing to pay a little extra for a “sure thing.”

I think we can agree that eBay and Amazon rule the online when it comes to customer ratings. But which is King in the world of online selling and shopping?

We can start by evaluating these two giants based on their revenues. According to Nytimes.com, eBay’s revenue climbed to $3.4 billion in the second quarter of 2012. The same article tells us that eBay’s stock gained more than 33 percent in the same time period, compared to a 25 percent gain in Amazon’s stock.

In the third quarter of 2012, Amazon’s revenue was less than analysts’ expectations: $13.18 billion in revenue, with 27 percent growth and an operating loss of $28 million, with a net income loss of $274. Amazon attributes this loss to its investment in LivingSocial. Based purely on this financial data, eBay seems to be doing better than Amazon.

But if we look past the revenues, which website do online shoppers prefer? EBay’s facebook page has a little over 5 million likes, with 80,000 people talking about it, whereas Amazon’s page has received a whopping 17 millions likes, with 330,000 people talking about it. We can also compare the traffic for each company’s main website: ebay.com and amazon.com, for the month of February 2013, for example. EBay received 405 million visits according to trafficestimate.com, while Amazon acquired 767 million visits.

Moreover, the forum from the aforementioned article shows that these consumers prefer Amazon to Ebay, in spite of what the numbers show. Consumers are convinced that Amazon has taken a loss because their strategy is, and has always been, to re-invest into the company. They prefer Amazon because they don’t “rip off” their customers, insinuating that Ebay does, and remark that hopefully, their “fairer” strategy won’t leave the company trailing behind competitors.

Peter Cheales (1994:98) puts it as follows: “If you can’t measure something, you can’t improve it”.
One of the key elements that makes Toyota SA’s TOUCH strategy so successful is the fact that they gather information from customer satisfaction surveys and after analysing the data, they are able to implement strategies to improve customer relation. The feedback from customers is used to improve service levels.
Since 1980’s Toyota has remained the market leader in the South African motor vehicle market, for example. The customer satisfaction index was converted from something abstract to real valuable data.

Analysing a case: WESBANK CSI
In 1994 the south african Bank WESBANK decided to implement customer satisfaction surveys to measure their impact on their customers, and learn from them experiences. The recolected data was analysed and it deliver some important data:
1. Staff’s knowledge of products and services was good
2. Their staff was professional
3. They gave enough and good advice
4. Customers apretiated the clarity of WESBANK documentation

Although most of the data recolected showed good feedback from their customers, the bank still decided to implement some improvement in certain areas, to strength customer loyalty.

It is thus obvious that customer’s perception of an organisation is of vital importance and plays a key role in the success of a company.

Anybody that has purchased something can review it.
It doesn’t matter if it is a product or a service, depending on the website’s rules, anyone can gives his (her) opinion on what is being offered, and depending on the scale provided you give the oportunity to your customers to give a feedback of the product, service or delivery related.

So how does it work:

Well it depends. Some sites will ask the person to give specific information to verify if the product/service being rated comes specifically from them, other sites like, TopTenREVIEWS or YELP will allow customers to review any product without verifying. What happens after is basically pure mathematics, and algorithm is used to filter out any reviews that they suspect are false or automatically generated. The remaining ones are posted on the website.

But is it a good idea? isn’t it too dangerous?

Well it depends on how the site manages both good and bad reviews.
In any case it is a good idea. It can benefit and boost the sales of a E-commerce company. It has been proved that 61% of customers read online reviews before making a purchase decision and 63% of customers are more likely to make a purchase from a site that has user reviews (http://www.econsultancy.com).
A positive rating is almost as important as the price. It can work as a decision maker. Customers always trust other customers, even more than certifications and advertising.

But what about the negative reviews?

A review that might seem negative to one person, can be a positive one in another person’s view.
“Take for example a review of a hotel that describes it as ‘not child friendly’. A couple looking for a romantic weekend getaway would not see this as a deterrent for booking, and would most likely welcome this fact” (http://www.digitalvisitor.com).
It also depends on how the company takes care of this. If the customer service department is aware of the negative reviews, and does everything in their power to give a reponse to the customer, it will give the impression that the company is serious and that they take care of their buyers.

So how do I encourage customers to review their purchases?

Easy, you just have to make it approachable and easy to do. Always remind them of the option to give their opinion.
Make it as easy as possible. Too much form filling may put off some customers.
Put the reviews where people can see them. If the product has a review, then show it!
Always publish good and bad reviews. It makes everything a lot more trustworthy.
Use reviews to deliver a more relevant user-experience. You can recommend other products in the future.

Our goal is to investigate the importance of consumer ratings of products and services
online. Today, consumers have a large quantity of information at their disposal
concerning products and services online. Not only can they find information about a
product or service from the company or vendor itself, but they are also able to access
information about other consumers’ opinions of and experiences with the product
specifically, and the company more generally.

This open and frank dialogue via the internet has changed companies’ relationships with
their customers – the consumer is no longer alone in making a decision about a good,
but is instead a part of a larger conversation with the global community online about the
quality of the service they receive and how things could or should be improved.

Of course, customer ratings are not only used to rate the products of large companies, but
are also employed in C2C markets like on Amazon, Ebay, etc. Thanks to these markets,
the C2C market is booming.